66/ Bloomberg, February 2023 Oil prices are falling due to higher-than-expected inventories and a strong dollar. However, supply is still on a declining trajectory. China has been buying more physical oil as it reopens its economy. @Bloomberg

OPEC+ total output fell by 0.77MM bbl/d in May. If OPEC+ production continues to decline on this trajectory, we estimate there may be a long-term production shortfall of 5.6MM bbl/d vs. initial pre-cut expectations:

OPEC+ has missed its production targets for 27 consecutive months, most recently in May by 3.35MM bbl/d. The total cumulative shortfall of oil supplied to the market by OPEC+ since January 2021 is nearing 1.4B Barrels:

The voluntary surprise production cuts of 1.16MM bbl/d announced in April came into effect in May. The actual amount of production cut among participating countries last month was only 0.86MM bbl/d, and only Saudi Arabia and the United Arab Emirates appear to have fully complied.

14/19 OPEC+ member countries missed their production quotas in May, and the smaller producers continue to drive most of the underperformance:

Total production for OPEC+ countries (excluding the OPEC exempt) in May 2023 was 36.75MM bbl/d, falling short of their 40.10MM bbl/d production quota:

OPEC+ concerned about underinvestment in oil globally: Bison Interests' Josh Young on @BNNBloomberg

63/ Wicked Energy, December 2022 The world needs more petroleum engineers. There’s a good chance that oil prices move much higher in the long term. Well productivity among big operators is declining.

62/ The ROI Channel, December 2022 The Biden administration is likely to try to continue to pressure oil prices lower. Oilfield inflation is eating away at E&P margins.

61/ Yahoo Finance, December 2022 Low valuation, small cap equities could do well in 2023, particularly as the fundamental outlook for commodity prices is compelling. Smaller companies have more robust balance sheets than many people think. @YahooFinance

We're considering bringing on another summer intern. Let us know if you're interested and would be a fit:

Recession Fears Mean Opportunity In The Oil Market

60/ Kitco News, December 2022 A driver of lower oil prices is flat Russian production, despite sanctions. Calls for the end of the energy crisis in Europe may be premature. Some E&Ps are seeing margin compression from higher input costs. @KitcoNewsNOW

59/ BNN Bloomberg, November 2022 The market is pricing in significant OPEC+ spare capacity, despite current production being materially below quotas. As oil and gas producers pay down debt they become less risky, even if oil prices fall. @BNNBloomberg

58/ Commodity Culture, November 2022 We’re running out of low-cost oil supply. The current U.S administration is simultaneously demanding that oil companies produce more oil while passing laws that restrict drilling.

3/ OPEC+ total output fell by 0.41MM Bbl/d in April. If OPEC+ production continues on this declining trajectory, we estimate there may be a long-term shortfall of 4.6MM Bbl/d vs. initial pre-cut expectations:

2/ OPEC+ has missed it's production targets for 26 consecutive months, most recently in April by 2.58MM Bbl/d. The total cumulative shortfall of oil supplied to market by OPEC+ since we started tracking this in January 2021 is nearing 1.4B Barrels:

1/ 14/19 OPEC+ member countries missed their production quotas last month. Many smaller producers are definitively out of spare capacity, and are driving most of the underperformance:

Total production for OPEC+ countries (excluding the OPEC exempt) in April 2023 was 37.52MM Bbl/d, falling short of their 40.10MM Bbl/d production quota:

57/ Mark Moss, November 2022 Russian oil production is already declining significantly. The fed is fighting an oil supply shortfall by trying to kill demand. The world refining market is not undersupplied. @1MarkMoss

56/ The Bull Club by E-Toro, November 2022 The oil cycle does not always overlap with market oil cycle. Buffett is investing in $CVX and $OXY because he sees the impending multi-year bull cycle, but is also constrained by his firm’s size. @eToro

56/ The Bull Club by E-Toro, November 2022 The oil cycle does not always overlap with the economic cycle. Buffett is investing in $CVX and $OXY because he sees the impending multi-year bull cycle but is also constrained by his firm’s size. @eToro @eToro

EIA weekly oil & products inventory report: Crude: -5.054mm Cushing: 0.319mm Gasoline: -2.408mm Distillates: -0.576mm SPR -1.1mm

API weekly oil & products report: Crude -6.083 mm Gasoline -1.919 mm Distillate +1.693 mm Cushing +465,000 SPR -1.1 mm